Get Your Solar Pros Startup Kit
Speak with a Solar Pro 24/7 1-855-SUNNY55

Find a Pro

It's Fast, Easy, and Free!

  • We track the best solar energy equipment
    and install providers in your area!

  • We'll help you get the best rate by taking advantage of local and federal rebates. Lease or buy!

  • Take advantage of current limited rebates now and add tremendous value to your home!

  • 1 2 3

All Fields Required


Solar Electric (PV) - Install and Service
Hot Water - Install and Service
Pool Heating - Install and Service
Space Heating and Cooling - Install and Service


Ready to Install
Planing and Budgeting
Investigating Options

No Thanks!

IRR – Calculating the Return on Investment

Installing a solar energy system is largely a financial decision. The internal rate of return (IRR) must be calculated for every company before a solar energy system is installed. In many cases, efficiently designed solar energy systems can have an IRR or up to 15-20%. Financially analyze the IRR on a solar energy for your company, and become familiar with the factors that determine a solar energy system's rate of return.

Conventional Electricity's Price

The per-kWh your company currently pays for electricity is key. The more your utility company charges you for electricity, the more your company can and will benefit from installing a solar energy system. Solar energy's value lies, first and foremost, in a company's ability to lower energy costs and avoid electricity charges.

Industrial companies typically pay less for electricity (44 cents/kWh in 1999) than commercial customers (7.3 cents/kWh in 1999). Remember, high electricity prices are associated with short-term payback for many companies.

Price Inflation for Electricity

If retail electricity prices increase, your solar energy system will also perform better financially. Since the year 200, electricity prices have increased 2.5% in the United States. If your company and its financial planners are certain that price inflation will continue to make the cost of electricity rise, than support planning for a solar energy system. Simpler measures like LED light bulbs and updated windows can lower your energy costs, but nothing compares to a solar energy system. Plus, because a solar energy system has a life span of 20-25 years, your company can solidify its strength against electricity inflation for decades. Simply put, the higher inflation, the greater chances of short (and long-term) return on investment for your company.

Performance of your System

It's necessary to account for the wear and tear your solar energy system will take on over the years. Photovoltaic panels expose metal surfaces to electromagnetic radiation in order to collect electrons and produce electricity. Silicon is typically used in solar cells, a lot of electrons are exposed to light, and it may require replacement after 20-25 years. Factor in the degradation and replacement of certain components of your solar system to fully calculate the return on investment during the long-term.

Maintenance of your System

As with any piece of expensive equipment, your solar panels will require a little maintenance. Solar equipment is well built, so maintenance costs are typically low, especially if you install a photovoltaic system that has no moving parts. However, in order to keep your solar system performing at peak levels, your panels must be free from dust and dirt. On the other hand, most systems do require an inverter replacement at around 15 years, so be prepared for that maintenance too.

Incentives from the Government

Solar energy systems for businesses are becoming more and more affordable, thanks to grants, tax incentives, and rebates from the Federal and state governments. Ask about a 50% bonus depreciation schedule for systems purchased and installed in 2008 and 2009, as well as a 30% tax credit from the Federal government. Depending on the state where your company is located, incentives and grants can significantly reduce the cost of installing your solar energy system, shortening the time in which you see returns on your solar investment.

« Back to Commercial